Seminar on the new Single Financial Guidance Body and debt advice funding

On 28 November 2017, the APPG brought together Ministers, creditors and representatives of debt advice agencies for discussion on the creation of the new Single Financial Guidance Body and the future funding of debt advice.

Guy Opperman MP, Minister for Pensions and Financial Inclusion explained the creation of the SFGB through the Financial Guidance and Claims Bill merges the Money Advice Service, the Pensions Advisory Service and Pension Wise all under one roof. As well as this, the Government is empowering the SFGB to develop a national strategy to improve peoples’ financial capability and their ability to manage debt, with the SFGB overseeing delivery of this strategy.

Baroness Buscombe, Minister at the DWP said the Government is using the FG&C Bill to introduce a Breathing Space scheme to give people a safer way to deal with their debts. This enacts a manifesto pledge and follows a campaign supported by charities and debt advice agencies. The Bill empowers the Government to make regulations to implement Breathing Space once it has received advice from the new body.

Peter Wyman CBE explained he had been commissioned by the Debt Advice Steering Group, a group of money advice and creditor organisations chaired by MAS, to carry out a review into debt advice funding, which he said had three main parts. The first key aspect of the review is to forecast the likely level of demand for free debt advice over the next three years. The second is to make recommendations on how debt advice should be funded in the future. And the third is to make recommendations on how to improve the overall quality and effectiveness of debt advice. Mr Wyman said his review welcomed feedback from all parties on his call for evidence.

In response, Francis McGee, Director of External Affairs at StepChange Debt Charity, outlined some of the various pressures on debt advice. Firstly, demand for services is outstripping capacity, and secondly, the sector faces increased costs from increasingly complex client circumstances and an enhanced focus on excellence. These factors would need to be taken into account when thinking about future funding. Mr McGee added that in view of the pattern of client debts, it would be important for new sectors, notably the public sector, to increase their funding contribution.

Secretary of the APPG, Paul Blomfield MP asked the Minister to expand on language in the Bill around subcontracting ‘delivery partners’. The Minister offered to clarify that the SFGB would continue to work closely with and contract with third sector agencies.

Ed Simpson from the FLA asked why the Government had chosen to enshrine Breathing Space in law before the close of its call for evidence. Baroness Buscombe said the Bill ‘supplements’ the Government’s consultation. Referring to Breathing Space in Scotland, the Minister added that ‘DAS is still not what it could be’ and that the Government was utterly focused on helping people through getting the policy design right.

On the issue of debt advice funding, Guy Opperman MP said he had been assured by MAS and the FCA that the level of the levy should sufficient for current needs. However, the Minister added that the Government would look to Peter Wyman’s review for further insight on the level of need for debt advice and the right level and mix of funding.